Page 35 - The South China Business Journal

Clinical trial quantity and quality over time

volumes surged by 350% on average and nearly 900% Made in China 2025 industrial subsidies collectively
for cancer drugs. Net revenue for covered oncology account for less than 1%. For Made in China 2025,
drugs rose by 500%. The authors test whether the authors checked whether the trial surge was
disease areas that gained the most insurance concentrated in cities that received targeted
coverage also saw the largest increases in R&D industrial subsidies. It wasn't ? non-subsidized cities
activity. Disease categories with greater coverage saw showed identical patterns of growth. This finding
disproportionately larger increases in clinical trial challenges the widespread assumption that China's
activity, while a placebo test on disease categories technology ascent has been primarily driven by state
never covered by the NRDL shows no systematic industrial policy. At least in pharmaceuticals, the
post-2015 increase. critical lever was expanding the market for innovative
drugs, not funding their development with subsidies
Industrial policy played a marginal role. or R&D grants.
A careful decomposition exercise quantifies the
relative contribution of five potential drivers. For Good market design outperformed subsidies.
oncology, the largest therapeutic area, the NRDL In the short run, the reform generated approximately
accounts for 43% of the observed post-2016 ?22.5 billion per year in net benefit to society from
increase in clinical trials (roughly 439 of 1,004 expanded patient access to existing drugs. But the
additional trials in 2024 relative to 2016). The long-run gains ? from entirely new drugs being
authors also tested whether the return of U.S.- developed ? are conservatively estimated at three
trained Chinese scientists and growth in scientific times that figure, roughly ?66 billion per year. By
publishing drove the surge ? and both factors did credibly expanding the market for innovative drugs,
show a positive effect. But together, talent inflows the reform raised the expected return on R&D
and knowledge accumulation explain only 24% of investment, pulling frontier clinical development
the post-2016 acceleration in trials. into China. A well designed insurance reform that
expands effective market size ? particularly one
Three other factors, including China's accession to that explicitly rewards clinical novelty in its coverage
international regulatory standards, a 2015 clinical trial criteria ? did more to catalyze frontier R&D than
application reform that cleared trial backlogs, and direct subsidies or grants.